I should disclose what? If you don't know about it, it won't hurt you, right? By not disclosing certain issues or topics, doesn't it allow me to sell you that item or my services a lot easier? In some cases, doesn't it make it harder for you to shop correctly?
Let me ask you, the consumer, a question. Are you in such a hurry, that if you allowed me an extra 20 minutes or so to explain the details and to disclose to you certain information, that I might just educate you more. In which case would possibly enable you to save more money, and/or to become more educated on that topic, and/or to possibly keep you from harms way?
Let me share this little piece of information with you. Knowledge is power. Yes, it can be very powerful, hence why you don't get this type of service from everyone. The less you know, the more advantage it is for that sales person. Or, in some cases, misleading information to you is also an advantage to that sales person. How then do you know what is the truth and what isn't.
Artist : Stephen Bolton of cartoonstock
For some reason, I have been seeing more and more lack of disclosures. Kris Wales talks about bank owned properties and why the banks aren't held to the same such standards as a realtor. Bank owned homes and their agents: Where does fiduciary responsibility end and human responsibility start?
For some of you that read my blogs, my biggest pet peeve is the lack of Good Faith Estimates not being disclosed. If a loan officer pre-qualifies you or pre-approves you, they should be disclosing a Good Faith Estimate to you. Now, there is no such law that they have to, unless you apply for a mortgage. In which case, according to RESPA, they have 3 business days to give you a copy. (a little secret... if you sign a good faith estimate, make a copy of it. Just because they didn't offer you a copy... 'common sense', right?)
Before I leave you all, just another quick story from a prospective client the other day. I had a lady that contacted me to see if she was getting the correct information from her current lender/loan officer. She was told that she was approved for a mortgage and locked into a rate. Now she could go find a home. Her concern was that the DPA (down payment assistance programs) program might be extinct in a month. And her loan officer told her that they might not be able to help her then. Rut row.....My concern was not that, after gaining the same information that I just told you. No lender will and can lock you into a rate, until you actually have a property address. Many, many years ago, there was such a program called lock & shop. But no investor allows for this in today's market. That was my first read flag.
But my main concern was that she never filled out an application, so she technically was not approved, but just pre-qualified. Please read this very important description : The difference between a Pre-Approval and a Pre-Qualification letter.
And while trying to secure a mortgage when speaking to a loan officer, please read this : What questions should be asked prior to your mortgage application.... This is just my professional opinion of 16 years in the mortgage industry.
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For more information on FHA loans, please go to this link. The FHA Expert
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Copyright © 2011 by Jeff Belonger of Infinity Home Mortgage Company, Inc
Great post Jeff and well written for the public. It always poses a diplomacy problem for me in trying to explain to a potential buyer how they aren't "really" approved, even though that's what their lender said. The public always seems to think that we as a new Realtor to the situation are just trying to get them to talk to "our" lender. Great posts like yours will go a long way towards educating the public. Thanks.
Banks, trusts, etc. don't "disclose" because they have never lived in the house and don't know the property, the systems, the maintenance history, etc. That makes sense to me.
However, a home owners and listing agent incur a high level of risk when they don't disclose, of course, that means disclosing accurately.
If we have a disclosure that doesn't disclose a defect and our home inspector finds it, that seller is MINE.
Jeff, i would love to repost this in my personal blog... giving you full credit and google juice through the link as well.
Your thoughts?
Chris the Implementer
Orlando Mortgage Pro
LYNDA..... my biggest problem is that either the loan officer knows the difference between the two... which is misleading... or that they don't, which is very scary. Either way, you have a major problem. And I have been having so many new consumers tell me lately that they learn more from me in 20 minutes than they did in 3 to 5 days with multiple loan officers. Even scarier... and thanks for the compliment.
LENN.... I understand your first sentence. But as so many realtors have mentioned, that they report back to the bank when asked to list the house and that they tell them the negatives. Then shouldn't it be disclosed? Just asking, because as you know, I am not a realtor. And I so love your last sentence. I think we should make people accountable.
CHRIS..... I have no problem with you re-blogging this.... please don't hesitate and send me a link to it later, unless my Google alert lets me know. But thanks for asking...
Hi Jeff,
Liked the post. I agree totally. I know when a broker pulls your score they are by law to give you a copy within 3 days but getting a good faith estimate is hard due to the fact that the broker knows they will shop around with it.
This isn't great. It's unsfortunate that we see this all the time. I mean all the time. Like buying a car without knowing the price tag or knowing the what the car specs are. This just irritates me that we still have the need to talk about this. Nice post.
The sellers here all sell "as is" with no disclosures required or expected by the buyer.
PATRICK.... I never heard about the fact that if a broker pulls your score/credit, that you have to send a GFE,,,, interesting. Or are you saying that they have to send the consumer their credit?
In regards to the broker, or in many cases, the loan officer... broker or banker, not giving the consumer a good faith? Well, that is my ticket in many cases, because that is when I educate the consumer and 80% of the time, I am correct in my reasoning. I tell the consumer that the other person has no excuse, not even being busy, but that they don't want the consumer to see it, as you mentioned. I use this to my advantage once I know. In any case, thanks for the compliment.
LARRY..... yes, very mad. I know life isn't fair and that people don't play fair. But this is a major investment for the consumer and you have loan officers running blindly in the dark with not butter knives, but with chains saws... chains saws that you can't hear. Very, very scary... and no matter how many laws take place, this will never change. Some people are just true sales people that sell...
DENISE..... well, "as is" is much different. But if an appraiser finds something that he/she needs to report, it could kill the deal then. Only HUD homes can be sold as is and still get financing under regular loan programs..... unless doing a rehab loan such as the 203-k loan.
Jeff, great information. I am with you that we still have people in our business that shortcut and don't tell the truth. For instance, how can you be pre-approved if no credit was pulled?
I use a "lock" method. I tell my clients your rate is this, it will never get worse it will only get better. If it got worse then it was my problem.
Dave